Business Directories

Iran bans imports of 600 goods, caps currency sales

Tehran, April 3, 2012

Iran has banned the importation of about 600 goods and only importers of essential items will henceforth benefit from preferential exchange rates, a report said.

Iran's energy-reliant economy is reeling from international sanctions aimed at stifling its lucrative oil exports. As a result, hard currency inflows have shrunk and the rial's value against the dollar plunged, forcing Tehran to take steps to preserve its foreign currency reserves.

Sharq daily newspaper quoted Hamid Safdel, director of Iran's Trade Promotion Organization, as saying that the 600 items temporarily banned have domestic equivalents. It did not specify the goods in question.

Importers of 180 luxury products will now have to buy foreign currency at the market rate instead of getting it at the official rate from state banks. The rial moves around 20,000 to the dollar on the market, well above the official rate of 12,260.

Despite frequent bans and restrictions, foreign goods are readily available in Iran. Many are shipped in by smugglers from nearby countries.

Iran's imports fell 4 percent to $61.8 billion in the Iranian calendar year that ended on March 19, while non-oil exports surged by 29 percent to $43.8 billion, data from the Customs Administration showed. Non-oil exports account for around a fifth of total exports.

The UAE led exports to Iran with 31.9 percent of the total, followed by China with 11.9 percent. Iran's main export markets included China, which took 16.7 percent of non-oil exports, Iraq with 15.3 percent, UAE with 13.4 percent and India with 8.2 percent.

Last month, the Islamic republic, which faces sanctions over its disputed nuclear programme, allowed the battered rial to trade freely, which analysts said was an attempt to revive foreign trade and attract a fresh supply of dollars to the market.

Before the new round of sanctions against Tehran, the International Monetary Fund forecast Iran's oil and natural gas exports would jump to $102.9 billion in the 2011/12 calendar year from an estimated $81.1 billion in the previous year.

Overall exports were projected to soar by over 21 percent to $142.9 billion and imports rise 8 percent to $101.4 billion. - Reuters